Florida Estate Planning Lawyer Blog

The Wall Street Journal online has an article on How to Ensure Relatives Don't Rip You Off. Also the Toronto Estate Law Blog has an article today on POA abuse.

The article mentions several things that can be done to safeguard clients.
1) a provision requiring regular accounting statements from the agents.
2) Naming co-agents who can serve as checks on each other.
3) naming a supervisor who has the power to fire an agent

When setting up a Power of Attorney, you want to name an agent while you're still in good health and can make clear decisions. Typically, such documents are included as part of a standard Florida estate-planning package, which also includes a Florida Will and health-care proxy giving an agent the power to make health decisions when you can't.

Powers of Attorney are often a tough balancing act: You want them to be simple for trusted family members or friends to implement, without too many hoops each time a transaction is made. But you also want to avoid giving agents a license to steal.

To further protect yourself, you can require that your agent provide family members, or a third party, such as a lawyer or accountant, with regular accounting statements. Another strategy is to name co-agents. While that can be a burden -- many transactions, for instance, would need two signatures -- it can also create a system of checks and balances. In some cases, lawyers appoint an additional safeguard: a "protector," who has the power to replace the agent if there is wrongdoing.

Another key point: Make sure to carefully lay out exactly what powers you want your agent to have. For instance, you can limit the agent's power to make gifts of your property, so they can't just give money to themselves. Spell out under what conditions gifts can be made, how much and to whom.

Today, I received a response from RocketLawyer about the article I wrote on using a Free Durable Power of Attorney and potential problems. The good news is they are asking for help to fix the problems. As noted in their email, they do encourage visitors to seek legal counsel from attorneys like me when they are unsure of doing something for themselves. My only question which I shall pose to them, is how is a consumer who is uneducated in legal matters supposed to determine when they are unsure of how to do something. Isn't the point of using a service like theirs to rely on their expertise to help create legal documents?
Below is a copy of their email

Dear David,

I recently read your critique of our Florida Durable Power of Attorney form on your blog. We strive to offer the best legal help to consumers online and we take criticism like yours seriously.

As such, perhaps you would be willing to help us perfect the form to remedy the defects that you think exist? We have our own staff attorneys who review our documents for accuracy regularly. But, that doesn’t mean that someone like you can’t add additional value for our visitors.

You also wrote about how to cancel a RocketLawyer.com membership. It is very easy. We stand by our promise of a free document, and [canceling] is clearly detailed on our support page, which is accessible from every page on the site. Our customer service reps are also trained to send people to this page immediately, as we have a 100% satisfaction guarantee.

Lastly, we also encourage visitors to seek legal counsel from attorneys like you, when they are unsure about doing something for themselves. Perhaps you would be willing to create a free profile at RocketLawyer.com to potentially help our visitors and even promote your services to potential clients?

Please feel free to contact me directly and perhaps after you have had a chance to create your profile and work with our editorial team, you may reconsider your assessment and help us deliver affordable legal help together.

Kind regards,
Charley Moore

I will keep you updated with the progress on this topic.

Gurfinkel v. Marmor, 32 Fla. L. Weekly D2931 (Fla. 3rd DCA December 12, 2007)

The decedent’s trust beneficiaries challenged a pre-death "amendment" executed by the decedent’s spouse as attorney in fact pursuant to a valid Durable Power of Attorney . The amendment "deleted" the trust’s primary asset stock in a family corporation. The stock was subsequently transferred to one of the decedent’s sons. The trial court relied upon language in the Durable Power of Attorney to uphold the amendment. The appellate court reversed, relying upon language in the Trust which indicted powers granted by the trust could be exercised only by the grantor and not by a conservator, guardian, or any person other than the grantor.

What does this mean, if you want your agent acting under a Durable Power of Attorney to be able to change your trust, your trust should include language to allow for it.

To review your Durable Power of Attorney and Florida Revocable Trust Contact a Florida Estate Planning Lawyer.

The other day, I wrote an article on the pitfalls of using a Free Florida Durable Power of Attorney. I have been thinking of a way to provide a good power of attorney for my readers. I have been unable to come up with a generic form that I feel comfortable publishing because of the huge liability associated with the Power of Attorney in Florida. Perhaps I will figure a way to accomplish this in the future. In the mean time, I have created the second most important document to any Florida Estate Plan - the Combination Living Will, Designation of Health care Surrogate and HIPAA Release.

You may ask what is a Combo Living Will and how is it different than my existing document. The biggest difference is that this document contains a HIPAA release which is necessary for your agent to obtain medical records, and the power for your agent to make decisions when you are unable to.

Many lawyers provide these as 3 separate documents. I find that my clients like to have them in a single document because it avoids the ability for your agent to show one or more but not all of the documents to achieve their desired results and circumvent yours. By having a single document you can make sure the objectives of Florida Living Will are preserved and consistent with any actions taken by your medical agent.
Free Combination Living Will, Designation of Health care Surrogate and HIPAA Release

You should have this document reviewed to make sure it was executed properly. Please contact your Florida Estate Planning Lawyer or Florida Lawyer to review the document.

Although a Power of Attorney often authorizes the agent to give gifts, agents should be careful when making gifts to themselves.

The Chicago Tribune has an article on an agent who gave herself $180,000 in gifts and the ensuing court battle over theft by deception, financial exploitation of an elderly person and conspiracy to commit financial exploitation of an elderly person.

If you believe someone has taken advantage of your or a loved on by the inappropriate use of a Durable Power of Attorney or Power of Attorney you should Contact a Florida Estate Planning Lawyer to review the facts.

A Power of Attorney is generally valid when you travel because a Power of Attorney valid in another state will be valid in Florida. That being said there has been a problem with out of state Power of Attorney being properly recognized in Florida. As a result Florida passed laws that when complied with allow the agent to recover fees associated with the enforcement of a Power of Attorney which is in substantial compliance with the statute.

What does that mean for you? There is no reason why someone should not accept an out of state Power of Attorney, but no recourse when they do not.

Generally when moving to Florida, we recommend that our clients execute new Durable Power of Attorney Documents when possible. When this is not possible clients can check with their local banks to see if they will accept them. This should be done prior to transferring money to the financial institution. We have seen cases where banks accept the transfer and creation of accounts and then do not accept the agent's authority later.

To check if your Durable Power of Attorney or Power of Attorney is compliant with Florida law please Contact a Florida Estate Planning Lawyer.

Recently we have notice that Hospice organizations are refusing to allow people to visit relatives or friends while under the care of Hospice.

In these cases, the people were turned away because someone with a Power of Attorney was able to state that the person was not wanted.

It is important to remember that a Power of Attorney or Durable Power of Attorney give an agent the right to act in certain circumstances. In Florida, a Power of Attorney does not give someone the right to make decisions regarding where they are located, who they can visit, or who they can talk to.

It is possible to make these decisions for an individual, but only when someone has been appointed as their Florida Guardianship. Even if someone is the Florida Guardian they may not have these rights.

If you have a loved one and you are being prevented from seeing them because of a Power of Attorney you should Contact a Florida Estate Planning Lawyer to discuss your situation.

Florida judge who presided over the Terri Schiavo case until her death, has a new assignment. He no longer judges Florida Guardianship cases. He judges divorce cases.

The Judges transfer from Florida Probate and Florida Guardianship court to family court should allow Judge Greer who is now 65 to serve the next three years in obscurity before his retirement.

Judge Greer is nationally famous and has 20 honors displayed in his chambers. The largest is the 2005 President's Award of Merit from the Florida Bar, "for your unswerving commitment to the rule of law, the independence of the judiciary and the fundamentals of American democracy."

With the recent cases like Britney Spears competency hearing, many have found the need for a Durable Power of Attorney and the Schiavo case is a good reason people need a Florida Living Will. After all if Schiavo had a Florida Living Will she and Judge Greer would not have had the national spotlight. The fight was only because Schiavo did not have a Florida Living Will.

If you would like a Power of Attorney or Florida Living Will please Contact a Florida Estate Planning Lawyer to discuss your needs.

A common technique with large Florida Estate Planning is the use of FLP's or Family Limited Partnerships. Neil Hendershot of the PA Elder, Estate & Fiduciary Law Blog summarized the recent highlights of the Heckerling Institute where they discussed those issues in detail.

The most important issues dealt with making sure there was

(1) not a gift on formation of a family limited partnership. This can be done by making sure the partnership is property funded and the capital accounts are credited. The recommendation was that during the next tax year he or she transfer partnership interest. This helps to avoid the argument that the transfer was contemplated at the time of the capital contribution. See Senda, T.C. Memo 2004-160 (July 12, 2004). One must also take this into consideration with additional contributions because they are valued with the amount given instead of a discounted valuation.

(2) Avoiding Bad Facts based on formation and operation. You do not want to have these issues used to devalue the discount on the entity.

• Disproportionate Distributions to senior family members.
• Distributions that cover senior family member's expenses.
• Do not create the partnership by an agent acting under power of attorney.
• Do not use partnership funds to pay estate taxes after death. If this looks like it will be necessary consider using a life insurance policy or a hands length loan from the partnership to fund those expenses if it is necessary.

(3) Senior family member should have no control at death or within 3 years of death to avoid an inclusion look-back period under IRC § 2035. If the senior family member must serve as a general partners remove "sole and absolute" authority language and any overly protective clauses.

(4) FPL's should be created for legitimate non-tax business purposes to avoid inclusion arguments. It is likely that the drafting attorney will provide testimony of the non-tax reasons. It might be advisable to use a separate attorney to draft the agreement who has no knowledge of the discounting opportunities when creating a Family Limited Partnership for Florida Estate Planning

(5) Potential problems arise with using a martial trust for the benefit of a surviving spouse. These interests may not get the same discounted treatment which can cause problems.

(6) Be careful with the 100 Shareholder rule when using S corporations as it is possible to have more than 100 shareholders when you look at all family members who are lineal descendants up to six generations including current and former spouses.

(7) Nonresident aliens or other non-approved shareholders can create problems with S corporations.

(8) S corporations can only have a single class of stock and all must have equal rights. Look out for disproportionate distributions, buy-sell installments, and split-dollar arrangements

The article goes on to discuss other concerns and should be reviewed by anyone looking to create a Family Limited Partnership for Florida Estate Planning

For more information on how a FLP can be an effective tool in Florida Estate Planning Contact a Florida Estate Planning Lawyer

Mississippi's Supreme court decision reinforces the importance of having a Durable Power of Attorney. A Florida Durable Power of Attorney can be one the most important Florida Estate Planning Documents, a Power of Attorney allows a person you "agent" or "attorney-in-fact" -- to make financial decisions for you when you are unable to make these decisions for yourself.

In this case, Mrs. Goodlett admitted her mother, to a nursing home. During the mothers stay at the nursing home, Mrs. Goodlett developed two decubitus ulcers (bed sores), which required surgery. Mrs. Goodlett told the nursing home that she was going to sue the nursing home for negligence and sent them a medical authorization with permission to release Mrs. Goodlett's medical records. Due to complications from a stroke, Mrs. Goodlett was unable to sign her own name to the medical authorization. The nursing home refused to release the medical records, claiming that because Mrs. Bernadette did not have a Power of Attorney over her mother, only Mrs. Goodlett could authorize the release of the medical records.

Mrs. Bernadette sued the nursing home on behalf of her mother for negligence.

The Mississippi Supreme Court reversed the trial court's decision because Bernadette did not have Power of Attorney for her mother, she was not entitled to her mother's medical records. Therefore, Bernadette could not file suit without including the required form.

Had Mrs. Goodlett given Bernadette a Power of Attorney before the medical records were requested, the lawsuit would have been able to proceed.
A Power of Attorney is an easy document to put into place and can make things much easier for your family if you are incapacitated.

Britney’s dad had was appointed as conservator of her person and co-conservator of her estate, which means her dad is now in control of what Britney can do, who she can see, and he’s controlling all access to her bank accounts and credit cards.

Over the weekend, Britney attempted to hire her own lawyer to fight her dad’s attempt to take over her personal and financial affairs.

But, the Court refused to recognize Andrew Streisand as Britney’s lawyer because the court-appointed lawyer assigned to evaluate Britney said that Brit doesn’t have capacity right now to hire her own lawyer.

You’d think that someone with her wealth would have a Will , a Revocable Trust , Health Care Directives, Powers of Attorney, Guardian Nominations … basically a comprehensive estate plan.

It’s too late now for Britney, but it’s not too late for you … today having a personal lawyer is both accessible and affordable and if you own your home, care about your family, and want a trusted advisor to call when you are in crisis, you should have your own. To create of review your Florida Estate Planning Contact a Florida Estate Planning Lawyer.

Florida changed their statute regarding Power of Attorney several years ago. It seems that many banks and other financial institutions were not honoring existing powers of attorney documents. Florida changed Florida Statute 709 to allow for enforcement and recovery of expenses associated with the improper denial of a Power of Attorney.

Clients often ask if what limits there are on a Power of Attorney or a Durable Power of Attorney .

Although a client can limit the powers in a Power of Attorney the right to change a Florida Will under Florida Law. Recently we have begun adding specific provisions to allow for the modification of a Florida Revocable Trust with a Durable Power of Attorney. When this happens it is important to also include provisions in the Florida Revocable Trust to allow for the modification by Durable Power of Attorney. Charles Rubin who writes the Rubin on Tax blog has an article where he discusses this. There was a recent Florida Case where a Florida Revocable Trust was in conflict with a Power of Attorney. The court ruled that the prohibition by the Florida Revocable Trust on modification by Power of Attorney trumped the Power of Attorney.

Florida residents should start the New Year off right, here are ten important Florida estate planning and Florida probate and tips for the New Year.

1. If you don’t have a Will, get one.
Florida estate planning and Florida Probate tip #1: Have a Florida Will. If you don’t have a Florida Will, get one. In particular, married couples with children from prior relationships should always have a Florida Will. Otherwise, the state will decide who gets the money at death.

2. Get a Medical Power of Attorney and Advanced Medical Directive.
Florida estate planning and Florida Probate tip #2: Along with a Will, everybody should have a Florida medical power of attorney and an advanced medical directive. A Florida medical power of attorney designates an individual to make health care decisions for you should you be unable to do so. An advanced medical directive, commonly called a living will, states in advance what you want in the way of life sustaining treatment when death is imminent or when you are in a persistent vegetative state.

3. Review all beneficiary designations on life insurance, retirement accounts, and other financial accounts.
Florida estate planning and Florida Probate tip #3: Review all beneficiary designations on life insurance, retirement accounts and other financial accounts. You may be surprised at what you find. Do not settle for a verbal confirmation. Make sure you see the documents.

4. Get a permanent life insurance policy.
Florida estate planning and Florida Probate tip #4: Evaluate the need for permanent life insurance. Liquidity is important in life and at death. The lack of liquidity at death can increase legal fees and cause property to be sold for less than its actual value – far less. Even a small amount of life insurance is better than none.

5. Put your permanent life insurance in a life insurance trust.
Florida estate planning and Florida Probate tip #5: If you have substantial, permanent life insurance, consider putting the life insurance in a life insurance trust. Moving your life insurance into a life insurance trust removes the insurance from your gross taxable estate for federal estate tax purposes and protects the insurance policy from creditors. This can save you 45% or more of the policy value.

6. Put your inheritance in an irrevocable trust for asset protection.
Florida estate planning and Florida Probate tip #6: Get it and give it in trust. When you give an inheritance in an irrevocable trust, you also give some level of asset protection. If you are the potential recipient of an inheritance and if you have the ability to speak openly with the person making the gift, consider suggesting that the gift be made in some form of irrevocable trust. There is some cost to a gift in trust. However, the asset protection benefits typically outweigh the cost.

7. Put all your estate planning documents in a safe deposit box.
Florida estate planning and Florida Probate tip #7: Obtain a safe deposit box and put your original Florida estate planning and other important documents in the box. Fire safes and file cabinets are certainly better than nothing if you let somebody know where to look. However, many Wills vanish or are lost shortly before death. If the original cannot be found and the original was last seen in your possession, Florida courts presume that you destroyed or revoked the Will. While a copy of a Florida Will can sometimes be probated in a Florida probate, it can be expensive and not always successful.

8. Protect your heirs against local expensive probate proceedings.
Florida estate planning and Florida Probate tip #8: If you own real estate outside of the state where your Will is to be probated, make sure that transferring the real estate to your heirs will not require a local, expensive probate proceeding. This can be accomplished several ways. Some states have a simplified probate procedure for making the transfer without opening a local probate proceeding. Other states allow for beneficiary designations through something called beneficiary deeds. In most states, the probate process can be avoided by transferring the real estate into a revocable trust. Otherwise, be prepared to spend several thousand dollars to make the transfer after the death of the owner. Note: Property in a foreign country can be very expensive to transfer upon death. Also pay attention to foreign estate tax. Unlike the United States, the estate tax can vary greatly based upon whom you give the property to at death.

9. Leave property to your husband or wife in trust.
Florida estate planning and Florida Probate tip #9: Consider leaving property to your spouse in trust instead of outright. The trust accomplishes three goals.

1. Avoiding estate tax.
2. Protecting the assets from the surviving spouse’s creditors.
3. Controlling how the remaining funds are distributed.

Many family estates have been lost when the surviving spouse remarries and leaves the family assets to the new spouse or his/her family. We see more money lost to shifting bloodlines than we have ever seen paid in federal estate tax.

10. Know if your state has state or estate/inheritance taxes.
Florida estate planning and Florida Probate tip #10: If you have a tax planning estate plan, know whether your state has estate tax. Florida does not have any estate tax, but if you become domiciled in another state your estate may be subject to estate taxes. Many states are implementing estate or inheritance taxes.

What is "fiduciary responsibility?"
An attorney-in-fact is a fiduciary and as such has a duty to invest and manage the assets of the principal as a prudent investor. This standard requires the attorney-in-fact to exercise reasonable care and caution in managing the assets of the principal. The attorney-in-fact must apply this standard to the overall investments and not to one specific asset. If an attorney-in-fact possesses special financial skills or expertise, he or she has an obligation to use those skills. The attorney-in-fact should keep careful records. Everything the attorney-in- fact does for the principal should be written down, and the attorney-in-fact should keep all receipts and copies of all correspondence, and consider logging phone calls so if the attorney-in-fact is questioned, records are available.

This is the last part on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

When does the attorney-in-fact's authority under a Durable Power of Attorney terminate?
The authority of the attorney-in-fact of a Durable Power of Attorney automatically ends when one of three things happens: (1) the principal dies; (2) the principal revokes the Power of Attorney, or (3) when a court determines that the principal is totally or partially incapacitated and does not specifically provide that the Power of Attorney is to remain in force. In any of these three instances, the Durable Power of Attorney is terminated. If, after having knowledge of any of these events, a person continues to act as attorney-in-fact, he or she is acting without authority. The power to make health care decisions, however, is not terminated when a court determines that the principal is totally or partially incapacitated unless the court specifically terminates this power.

What is the procedure for a principal to revoke a Power of Attorney?
Written notice must be served on the attorney-in-fact and any other party who might rely on the power. The notice must be served either by any form of mail that requires a signed receipt or by certain approved methods of personal delivery. Special rules exist for serving notice of revocation on banks and other financial institutions. Consult with your lawyer to be sure proper procedures are followed.

When does a general Power of Attorney terminate?
In addition to the three events detailed above, a general (non-durable) Power of Attorney terminates when the principal becomes incapacitated. If the principal of a non-durable power of attorney is believed to be incapacitated, then the attorney-in-fact should consult with his or her lawyer before exercising any further powers on behalf of the principal.

Court proceedings were filed to appoint a guardian for the principal or to determine whether the principal is incapacitated. How does this affect the Power of Attorney?
If a court proceeding to determine the principal's incapacity has been filed or if someone is seeking to appoint a guardian for the principal, the Durable Power of Attorney is automatically suspended and an attorney-in-fact must not continue to act. The power to make health care decisions, however, is not suspended unless the court specifically suspends this power.

Authority as attorney-in-fact has been suspended because guardianship proceedings are pending for the principal. Now there is an emergency but there is no guardian and no attorney-in-fact to do something. What now?
The attorney-in-fact may ask the court for special permission to take care of the emergency even though the Power of Attorney remains otherwise suspended. Contact your lawyer.

This is the sixth part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.